Billerud Ab · OMXSTO:BILL
Billerud Ab — BillerudKorsnäs — Q1 2018 Earnings Presentation
18 slides from Billerud Ab's earnings presentation, Apr 20, 2018
Slide 1: Interim Report January-March 2018
INTERIM REPORT JANUARY-MARCH 2018 2018-04-20 Petra Einarsson, CEO, Susanne Lithander, CFO
Slide 2: Key Highlights
KEY HIGHLIGHTS Stable production Strong results - adjusted EBITDA margin 19% High demand - net sales up 5% Investments progressing according to plan Positive market outlook in both the short and long term 2
Slide 3: Strong Demand – Packaging Paper Q1 Development
STRONG DEMAND PACKAGING PAPER Q1 DEVELOPMENT Net sales + 6% vs Q1-17 Increased prices Improved product mix 2,276 NET SALES SEK MILLION Lower production volumes EBITDA + 19% vs Q1-17 Wood and pulp prices continues to 467 EBITDA SEK MILLION increase Market expected to remain solid Potential to increas
Slide 4: Stable Production – Consumer Board Q1 Development
STABLE PRODUCTION CONSUMER BOARD Q1 DEVELOPMENT Net sales +2% vs Q1-17 Stable production Improved product mix 2,164 NET SALES SEK MILLION EBITDA +8% vs Q1-17 Cost inflation 473 Market expected to remain solid EBITDA SEK MILLION Tetra Recart challenges other packaging materials 22% EBITDA MARGIN 4
Slide 5: Solid Result – Corrugated Solutions Q1 Development
SOLID RESULT CORRUGATED SOLUTIONS Q1 DEVELOPMENT Net sales +2% vs Q1-17 Increased prices Improved product mix 953 NET SALES SEK MILLION Lower production volumes EBITDA +11% vs Q1-17 Lower fixed costs 210 EBITDA SEK MILLION Market expected to remain solid Potential to increase prices The world’s stro
Slide 6: Strong Potential in Next Generation
STRONG POTENTIAL IN NEXT GENERATION New capacity to capture growth Streamlined product portfolio Liquid board More focused production units MF-paper Reduced risks and volatility FibreForm Sack Coated and White Top Liquid board Light weight White MG-kraft 6
Slide 7: Gruvön Progressing According to Plan
GRUVÖN PROGRESSING ACCORDING TO PLAN Keeping time frame Reinforced organisation Programme management office Machine ready Mill ready Product ready Business ready Fully ramped up Project start Start up EBITDA positive ~550 ktonnes Construction Certification material and ~300 ktonnes simpler f
Slide 8: World-Leading MG Centre in Skärblacka
WORLD-LEADING MG CENTRE IN SKÄRBLACKA Project on track The Tervarsaari machine is under start-up in Skärblacka (PM10) Tervasaari The machine is expected to produce ~40 ktonnes this year Skärblacka When fully ramped late 2019 PM10 will produce ~90 ktonnes MG paper* Production start Positive contribut
Slide 9: Focus on Operational Excellence
FOCUS ON OPERATIONAL EXCELLENCE Safety culture programme Production Stability A customer-centric quality process Production stability roadmaps Product Quality Occupational Health & Safety 9
Slide 10: Financial Targets
FINANCIAL TARGETS Area FY target Outcome Q1 2018 Growth 3-4% 5% ✔ EBITDA >17% 18% ✔ ROCE >13% 13% ✔ Net debt/EBITDA <2.5 1.55 ✔ 10
Slide 11: Higher Sales Prices Drive EBITDA
HIGHER SALES PRICES DRIVE EBITDA 1400 1200 1 065 1000 923 800 600 400 200 EBITDA Q1 Cost/volume Sales prices Currency Wood Fibre Chemicals EBITDA Q1 2017 shortage 2018 11
Slide 12: Increased Net Sales
INCREASED NET SALES Net sales, SEKm Continued strong demand in all 7000 business areas 5 636 5 897 6000 Increased sales prices 5000 4000 Stable production 3000 2000 Negative effect from shortage of Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 wood TCW index Positive currency effects 140 135 130 125 120 Q1 Q2 Q3 Q4 Q1
Slide 13: Negative Effects from Cost Increases
NEGATIVE EFFECTS FROM COST INCREASES Wood Cost Index Demand-driven price increase 180 for wood 160 140 Pulp prices at all-time high 120 levels 100 80 2005 2008 2011 2014 2017 Increased chemical prices Source: BillerudKorsnäs – Total consumption hard and soft wood Caustic Soda, EUR/dmt 800 700 600 50
Slide 14: Strong Underlying Cash Flow
STRONG UNDERLYING CASH FLOW Cash flow from operations, SEKm Solid cash flow from operations to handle investments 1200 806 800 ROCE in line with target despite increased capital employed 400 261 0 Net debt increased to Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 MSEK 6,056 (4,165) Net debt/EBITDA High interest from
Slide 15: 2018 Outlook
2018 OUTLOOK Demand and order situation are expected to be strong with normal seasonal variations for all business areas Demand-driven cost increases expected to continue The financial impact on Q2 2018 from wood shortage is estimated to MSEK 50-75 Overall capacity will remain at 2017 level Increase
Slide 16: Summary
SUMMARY Stable production Strong results - adjusted EBITDA margin 19% High demand - net sales up 5% Investments progressing according to plan Positive market outlook in both the short and long term 16
Slide 17: Save the Date
SAVE THE DATE Capital Markets Day: Stockholm – Monday 17 September Capital Markets Briefing: London – Tuesday 18 September More info will be posted on www.billerudkorsnas.com 17
Slide 18: Disclaimer statement
Disclaimer statement This presentation may contain forward-looking statements. Such statements are based on our current expectations and BillerudKorsnäs do not give any assurances that such statements will materialise. Because these forward-looking statements involve both known and unknown risks and